Let’s See if Earnings and Employment Keep the Momentum for the GBP
The GBP has been quite bearish in recent months, but last week we saw quite a reversal from below 1.20 as the sentiment improved after the UK parliament voted to pass a bill to make a no deal Brexit illegal. Yesterday the Queen passed the bill which now turns into a law.
As a result, GBP/USD has climbed nearly 500 pips so far. Although, the economic reports released from the UK yesterday also helped. The GDP increased by 0.3% in July, while manufacturing, which was expected to contract again for the third time in the last four months, also increased by 0.3%.
These figures eased some of the worries about a possible recession in the UK. Although, today we will get to see the UK manufacturing report. That includes the new jobs, the unemployment rate, which is expected to remain unchanged at 3.9%, and the average earnings index. Earnings have been surging, increasing by 3.7% 3M/Y. If they keep the pace or increase further, then some more nerves will be relaxed, which will help the GBP further.
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